Image courtesy of Pixabay

Half the money you spend on customer experience is wasted.

Well, that’s a pretty bold statement coming from someone who advocates designing and delivering a great customer experience!

Hold tight. It’s not quite as crazy as it sounds!

I came across this quote the other day…

Half the money I spend on advertising is wasted; the trouble is I don’t know which half. -John Wanamaker

… and it got me thinking, as these things do sometimes.

What exactly does that quote mean? I’ve seen a few interpretations, but I think the most common one revolves around not being able to qualify or quantify the effects of advertising. Which ad brought customers into the store, the weekday or the weekend ad? the radio ad or the newspaper ad? which one caused them to buy? etc.

And that led me to think about a couple different interpretations that can be applied to customer experience.

First, it made me think about how to measure the effectiveness of your customer experience efforts or how to make sure the improvements you make are meaningful to your customers – and to the business. What are some of the metrics you can use to measure your overall efforts? Some examples are listed below, with the first four or five reflecting the voice of the customer, while the rest represent their actions.

  • satisfaction scores
  • effort scores
  • ease of doing business score
  • net promoter scores
  • actual referrals
  • retention rates
  • renewal rates
  • order/purchase size
  • repurchase rate
  • cross-sells
  • upsells
  • customer lifetime value

If your customer experience isn’t worthy, it will be reflected in these metrics. But, to the point of Wanamaker’s quote, how do you know which half of your CX dollars/efforts resulted in the uptick of these metrics? You’ve really got to make sure you track and measure your improvements at a much more micro level to capture the real effect of their impact (and then correlate them to overall outcomes). If they’re not working, figure out why not and redesign.

Another angle the quote made me think about: don’t go crazy and think you need to fix everything. Be systematic about your approach to customer experience design and improvements. Do consider the ROI, but most importantly, consider what’s most important to customers. Do those things, fix those aspects, that are most impactful to them. If you make improvements where improvements aren’t needed or to those areas that aren’t important to your customers or don’t move the needle for them, you are wasting your money. Find out what’s important to them and start there. How do you find out? Map their journeys. Listen to them. Ask them. Do some analysis (e.g., key driver), and prioritize improvement opportunities.

And, finally, an angle that is related to advertising: stop wasting money on advertising to position your brand. Remember, the experience speaks louder than words. If your advertising is not aligned with your experience, if you say you (are going to) do something and then don’t or say you are something that you’re not, then you’ve actually wasted all of your advertising dollars. Spend (or waste) advertising dollars, and customers will be fooled; (re)design the experience, and they will come.

How will you avoid wasting half (or all) of your CX budget?

Listen to customers and determine what’s important and impactful to them. Identify your key moments of truth. Improve the experience when and where it matters. Measure the specific improvements. Redesign where you’ve fallen short.

Focus on the experience, and the business will come.

Starbucks is not an advertiser; people think we are a great marketing company, but in fact we spend very little money on marketing and more money on training our people than advertising. -Howard Schultz